Mortgage lender Housing Finance’s (HF) net profit fell 81 per cent in the nine months to September, weighed down by bad loans.
HF Group’s profit stood at Sh159 million, down from Sh837 million during a similar period last year. The lender said yesterday the slowdown in the property market as a result of the prolonged electioneering period had led to the jump in defaults on loans.
“Gross NPL (Non-performing Loans) increased during the period due to a slowdown in the property market and overall macroeconomic conditions,” said the firm in a statement.
NLPs went up from Sh5.5 billion last year to Sh8.1 billion this year.
The mortgage financier’s revenues came in 25 per cent lower than a similar period last year to Sh2.8 billion from Sh3.7 billion last year. Interest income from loans was down Sh1 billion from Sh6.1 billion last year to Sh5.1 billion, indicating that the bank went slow on giving out loans.
The group’s loan book shrank from Sh53.9 billion to Sh51.1 billion during the nine months to September.
The lender said it had instituted cost-saving initiatives that would reduce its expenses, which grew marginally from Sh2.67 billion in 2016 to Sh2.59 billion this year.